Japan, US to Clarify Patent Rules US Companies Are Winning Suits against Japanese Firms for Infringement of Patent Rights - Spurring Efforts on Both Sides to Harmonize Patent Procedures

AS many an American inventor has found out the hard way, build a
better mousetrap and companies in Japan will beat a path to their
own patent office to claim some variation on the idea as their own.

What's more, a well-made, inexpensive, made-in-Japan version of
that mousetrap might then emerge later and win market share in the
United States.

But the days may be numbered when a Japanese firm can easily
imitate (some foreign firms say "steal") a foreign discovery with
only minor mutation. The US and Japan appear to be moving toward an
agreement on how to "harmonize" their very different ways of
granting patents.

"We're moving quickly from friction over patents to
harmonization," says Shoji Tada, an official at the Japan Patent
Office, which is under the Ministry of International Trade and
Industry.

A compromise may not come too soon for some Japanese firms. Many
of them are being forced to pay high penalties to American firms
and inventors who have gone to US courts in recent years to claim
infringement on their patents.

Last spring, in the most recent notable case, Minolta camera
company was forced to pay $127.5 million after Honeywell filed a
lawsuit claiming that it had invented the autofocus idea now used
in almost every Japanese camera. Other Japanese firms face similar
claims by Honeywell.

Such well-publicized disputes over high-tech patents, as well as
over drug designs and computer software, have encouraged many US
firms to defend their patents in court. And often, the Japanese
firms are easy targets in what has become known in Japan as "patent
wars." The Nikkei business newspaper estimates Japanese firms face
about 1,000 patent disputes. "There's still a big gap in concept
between the US and Japan on what is infringement of a patent," says
Yoshikazu Takaishi, general counsel for IBM Japan.

In a 1990 Japanese Machinery Exporters Association survey, 173
Japanese firms reported that they were involved in 207
patent-infringement suits filed by foreign firms, mainly from the
US.

"US industry has been slowing down and companies are going to
court to protect their patents and make more money," says Akira
Okawa, a private patent attorney and former chief examiner in the
Japan Patent Office. Most of the US victories rely on judgments by
American juries. "We don't have much experience with a jury
system," says Mr. Okawa. "And US juries are politically biased
against Japanese companies."

THE exporters association also found that in 248 cases the
Japanese firms settled out of court. Most settlements were cash
payments, but some resulted in cross-licensing agreements and
payment with special technology. "These lawsuits are added pressure
on us to harmonize the Japanese patent system with the US system,"
Mr. Okawa said. They also have spurred Japanese companies to beef
up their patent offices and learn more about US patent law.

More than just a moneymaker for US firms, however, the lawsuits
are a highly visible example of a decade-long push by the US
government and industry to fight back against Japan's economic
challenge and to improve American competitiveness by better
protecting US intellectual property rights, which includes patents,
copyrights, and trademarks.

In various political arenas, US officials have tried to pressure
Japan to alter its patent system. …

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